Contents Past performance is no guarantee of future performance - - PowerPoint PPT Presentation

Professional Insurance Presentation to

Contents

“Past performance is no guarantee of future performance”

Professional Indemnity Claims – A Bleak Picture

• Steady increase in notification and cost

in recessionary years

• Dramatic increase in notifications the

last 3 years

• 7 Claims paid or with reserves over
• € 3,000,000
• Two claims paid over €6,5m

What has happened from 2008 to date

• Increase in counter claims when fees are

collected

• Size of Claims increasing
• Professionals Caught as “last man

standing”

• Have Construction professionals suddenly stopped

being competent? No

• Are they doing things differently or in a way more

risky than before? Perhaps

• Have clients become more demanding and claims

aware Certainly !

Professional Indemnity

Where do claims come from?

• Planning
• Poor Workmanship
• Project Management
• Defective workmanship
• Fire safety
• Valuation
• Supervision of contractors
• Incorrect assessment , timeframe

Professional Indemnity

When to Be alert

• When the client becomes insolvent or goes bankrupt
• When there is a fee dispute
• When the client is being investigated by external

regularity body

• Such as the HSA or Government Agency

Professional Indemnity

Ways of Avoiding Losses

• Risk Management

Starts with Partners & Senior staff Structure and organisation Responsibility and Supervision

Professional Indemnity

Ways of Avoiding Losses

• Appointment of Practice review manager
• Leadership from the top
• Quality Objectives
• Practice Planning
• Review and effectiveness of systems

Professional Indemnity

• Quality Management System

Concentrate on effectiveness Staff involvement Continuous process Quality culture – customer satisfaction Maintain effective diary system, with some form

• f check

Maintaining good telephone messages

Professional Indemnity

Ways of Avoiding Losses

• Quality Management System-

examples of exposure

• Absent / incomplete documentation
• Absence of Terms of engagement
• Staff operation outside authority
• Absence of reports/ disclaimers
• Recruitment failures- references

Professional Indemnity

Ways of Avoiding Losses

• Evaluation of new / existing clients
• Clients instruction, nature of work, co operation

necessary, completion dates

• Credibility of Management
• Quality of financial / managerial controls
• Fee to work carried out
• Potential problems

Professional Indemnity

Ways of Avoiding Losses

• Evaluation of new / existing clients
• Examples of High Risk Work

Financial stability of client Complexity of contract Funding Major Property transactions

Professional Indemnity

Ways of Avoiding Losses

• Letters of Engagement

Use Letters of engagement for all work Limit Liability on the letter Clear statement of purpose –reports / opinions

especially one off cases

Disclaimer wording For discussion only – on draft copies Statement regarding restriction of circulation

Professional Indemnity

• EXAMPLE EXTRACTS TO INSERT INTO AN ENGAGEMENT LETTER FOR THE COMPILATION

OF THE UNAUDITED FINANCIAL STATEMENTS OF A LIMITED COMPANY

• Liability provisions
• We will perform the engagement with reasonable skill and care. The total

aggregate liability to the Company and the Board of Directors, as a body,

• f whatever nature, whether in contract, tort or otherwise, of [insert name
• f Professional Firm ] for any losses whatsoever and howsoever caused

arising from or in any way connected with this engagement shall not exceed [insert amount]

• This is an example of a liability cap only, which will be one of a number of

provisions relating to the liability and any limitations thereon. For example, the liability provisions will need to make it clear that you are not seeking to exclude those liabilities (such as liability for their own fraud) which cannot be excluded by law.

• Members may also wish to consider guidance issued in the Institute’s

Rules of Professional Conduct – Professional Indemnity Insurance Regulations and Guidance

Professional Indemnity

Ways of Avoiding Claims

• Avoid free advice
• Agree Fee or rating structure prior to commencement
• If relying on specialist opinion ensure the client knows

where this advice has come from

Professional Indemnity

Claims

Concentrates the insured in respect of the claim against them Clarify the insureds understanding of the claim against them

• Provides a starting point for investigation
• Permits and desk study of the incident

Professional Indemnity

Claims / Complaints how to handle them

Fully Investigate the facts Evaluate the issues and evidence

• Do not solely rely on insured recollection of events
• Obtain a complete & Detailed account of

Claimants case

• Collate all the information
• Identify and highlight differences of opinion

Professional Indemnity

Claims / Complaints How to handle them

Set a specific long term claims / complaints handling plan.

• Identify in writing all the salient points of the incident
• Investigate as fully as possible immediately-

Crystallise the issues

• Weigh up the strengths and weaknesses of both sides

Try to evaluate from an independent point of view

• List the sums applicable consider your liability & quantum

Professional Indemnity

Claims / Complaints how to handle them

Meet with, or make contact with Solicitors, Experts, Your Broker, and others immediately to obtain their contributions to: Further investigation and evidence required Appraisal of Liability and quantum Steps to be adopted to bring settlement / closure Adopt and Develop ideas for settlement Continue the dialog until everyone agrees the route to follow

Professional Indemnity

Emerging Risks

New exposures

Cyber Liability / Data Protection Employment Related Risks Environmental Risks

Professional Indemnity

Cyber Liability Insurance

What is Cyber Risk ?

• The business risk associated with the use, ownership,
• peration, involvement of IT
• Attacks can occur from:
• Rogue employees
• Negligent Employee
• Company outsiders
• Vendors
• Social networking

Cyber Liability Insurance

Why Buy

• New Crime
• Threats from Employees , Social Networking and Media , BYOD
• Loss of data, industrial espionage, extortion, identity theft
• Policy cover

Breach Costs Cyber Business interruption Hacker Damage Cyber Extortion Privacy Protection Media Liability

• Premiums start from €500

Directors and Officers Liability

Why Buy

• Increased focus on good corporate governance

highlighting Directors responsibilities

• Increase in Directors Responsibilities –

requirements for compliance statements in 2005/ 2006

• Directors Liability is unlimited.
• Personal Assets required to defend claims if no

cover

Employment Practice Liability

Employment Practice Liability What Does it cover

• Claims brought by employees against

the company or other employees in respect of employment related issues.

• Covers judgements, settlements and

defence costs

Employment Practice Liability

Why Buy

• Increased frequency of claims / incidents
• Employees more aware of their rights
• No cap in payouts for civil claims
• Increased Immigration resulting in increased

discrimination

• Employees may pursue claims in parallel at the

employment tribunal, Labour court, H&S

Environmental Risks Exposures

• Brown Field site surveys
• Pollution issues
• Site contamination
• Health and Safety issues

Professional Indemnity Why Arachas Professional Indemnity

• “A” Rated Insurers
• In House Underwriting Exclusive facility
• Claims Control
• Competitive Pricing
• Easy Renewal / Guaranteed Renewal
• Wide Policy Wording
• Pollution Cover automatically included

Arachas Facilities

Special Risks Insurance

(PI, D&O, EPLI, PTL)

Specialist Insurance facilities Construction and Allied trades Financial Services – Life Pensions, Income

Protection

Personal Lines – Household and Motor

Can you make better use of your taxes?

Did you know ……

• You can protect your lifestyle in the event
• f loss of income due to sickness Tax

Efficiently

• You can provide financial security for

loved ones in the event an untimely death Tax Efficiently

You can save for your future Tax Efficiently

Arachas Financial Services Team : we can provide solutions to look after your financial wellbeing tax efficiently

Financial Advisor : Elaine Wilson E: elaine.wilson@arachas.ie / T : 021 4297261

Arachas

9, Eastgate Avenue The Courtyard Eastgate Business Park, Carmanhall Road Little Island Sandyford Business Cork Park Dublin 18 Telephone: (021) 427 0505 (01) 213 5000 Fax: (021) 427 5540 (01) 213 5001 Mobile (087) 279 6677 E Mail martin.adams@arachas.ie

Working together for Professional business solutions